The interstitial cell of hydra is a multipotent stem cell, capable of differentiating into four types of nematocytes and nerve cells. The types of cell-cell interactions influencing the commitment of the interstitial cell to a particular differentiation are under investigation. The approach is to alter the cell composition of the tissue and study the division and differentiation behavior of the interstitial cell population. The cell composition of the intact animal is altered by removing cell types selectively with drugs or in the case of nematocytes with electric shock. The cell composition is also altered by constructing reaggregates of hydra cells with selected cell populations. Normal reaggregates develop into normal animals. At present three types of influences have been identified. The i-cell density in the tissue affects the commitment to division or to differentiation. I-cell differentiation is affected by the position of the cell along the axis of the body column and by feedback from the nematocyte populations. BIBLIOGRAPHIC REFERENCES: Bode, H. 1974. Activity of Hydra Cells in vitro and in Regenerating Cell Aggregates. Am. Zoologist. 14: 543-550; Barzansky, B., H. Lenhoff and H. Bode. 1975. Hydra Mesoglea: Similarity of its Amino Acid and Neutral Sugar Composition to that of Vertebrate Basal Lamina. Comp. Biochem. Physiol. 50B: 419-424.